Yesterday the United States Securities and Exchange Commission released an official statement about the unfortunate fate of BitClave, the U.S.-based ICO project with Slavic roots.
Meaningful relief to investors
According to the SEC order, the BitClave project, incorporated as BitClave PTE Ltd., conducted an unregistered initial coin offering that started in June 2017.
Unregistered $25.5 Million ICO Issuer BitClave PTE Ltd. to Return Money for Distribution to Investors https://t.co/6020jWq36o
— SEC San Francisco (@SF_SEC) May 28, 2020
The project managed to raise cca. $25.5M from 9,500 investors. They received Consumer Activity Tokens or CAT, Ethereum-based coins. The regulator highlights that CAT had all of the characteristics of a security.
E.g. the team of BitClave actively promoted its listing on third-party exchanges and emphasized the opportunity of its price to grow in the future.
Despite this fact, all coding and marketing activities of the product are frozen and its team is showing no interest in maintenance or further development of the platform.
Severe penalty
The team of Bitclave reached an agreement with the SEC to refund all $25M to investors through a dedicated Fair Fund.
Also, they are being charged a prejudgment interest of $3.5M, and a penalty of $400,000. CAT must be removed from all trading platforms and permanently disabled by Fair Fund managers.
It should be reminded that BitClave raised funds for the development of a decentralized search engine and personal data processing system.
Recently, the SEC reached an agreement with another ICO from 2017, Enigma. This team must refund $45M to ENG token holders and pay a $0.5M civil penalty. Furthermore, the project is obliged to register ENG as a security and to send periodic reports to the SEC.
